Science and Technology News

Wednesday, December 5, 2012

International Cyber-Fraud Ring Responsible for Millions of Dollars in Fraud Dismantled

WASHINGTON – In a coordinated international takedown, law enforcement
officials in Romania, the Czech Republic, the United Kingdom and Canada,
acting on provisional arrest requests made by the United States,
arrested six Romanian nationals today for their alleged involvement in a
sophisticated multimillion dollar cyber fraud scheme that targeted
consumers on U.S.-based Internet marketplace websites, announced
Assistant Attorney General Lanny A. Breuer of the Justice Department’s
Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern
District of New York and FBI Assistant Director in Charge George
Venizelos of the New York Field Office.

“As a result of extensive cooperation between U.S. and European law
enforcement officials, the defendants have been charged with a scheme to
defraud unsuspecting Americans of millions of dollars,” said Assistant
Attorney General Breuer. “The Department of Justice is committed to
finding and prosecuting Internet fraud aggressively, wherever it happens
and however hard the perpetrators work to conceal their crimes.”

“Thanks
to our international law enforcement partnerships, even the most
sophisticated criminal organizations are not beyond our reach, and we
will continue our efforts to protect American consumers from these fraud
schemes on Internet marketplace websites,” said U.S. Attorney Lynch.

“The
FBI is committed to protecting the American public from predatory
conduct whether it originates here or abroad,” said FBI Assistant
Director in Charge Venizelos. “The international nature of many
organized crime groups makes it essential for us to work with our
partners here and overseas – as we did in this investigation – to rein
in the alleged criminals.”

A criminal complaint unsealed today in U.S. District Court in the
Eastern District of New York charges Romanian nationals Emil Butoi, 34,
Aurel Cojorcaru, 43, Nicolae Ghebosila, 43, Cristea Mircea, 30, Ion
Pieptea, 36, and Nicolae Simion, 37, and Albanian national Fabian Meme,
42, each with one count of wire fraud conspiracy and one count of money
laundering conspiracy. Butoi, Cojocaru, Meme, Mircea, Pieptea and
Simion are also each charged with one count of passport fraud
conspiracy.

The government will seek the defendants’ extradition to the United States pursuant to the relevant international treaties.

As
alleged in the complaint, the defendants were responsible for
saturating Internet marketplace websites including eBay, Cars.com,
AutoTrader.com and CycleTrader.com with detailed advertisements for
cars, motorcycles, boats and other high-value items generally priced in
the $10,000 to $45,000 range.

Unbeknownst to the buyers, however, the
merchandise did not exist. The defendants allegedly employed
co-conspirators who corresponded with victim buyers by email, sending
fraudulent certificates of title and other information designed to lure
the victims into parting with their money. Sometimes, the defendants
allegedly pretended to sell cars from nonexistent auto dealerships in
the United States and even created phony websites for these fictitious
dealerships. In at least one transaction involving Ghebosila, the
“seller” allegedly pretended to be the widow of an Iraq war veteran who
was selling her family’s mobile home so that she could care for her
children. In other transactions, the defendants allegedly duped victims
into sending tens of thousands of dollars for non-existent vehicles,
including Lexus, Audi, Ford, Chevrolet, Dodge, Toyota, Mercedes, Porsche
and BMW cars; Big Dog Mastiff and Ninja motorcycles; a Fleetwood Storm
motor home; and boats.

As part of the scheme, Cojocaru, Meme, Butoi and others produced
high-quality fake passports so that foreign national co-conspirators in
the United States, known as “arrows,” could use the passports as
identification to open American bank accounts. The complaint alleges
that Cojocaru was recorded on video during the investigation displaying
new holograms that he was using to create more authentic-looking
passports.

According to the complaint, after the “sellers” reached an agreement
with the victim buyers, they would often email them invoices purporting
to be from Amazon Payments, PayPal or other online payment services,
with wire transfer instructions. However, the defendants and their
co-conspirators allegedly used counterfeit service marks in designing
the invoices so that they would appear identical to communications from
legitimate payment services. The fraudulent invoices directed the
buyers to send money to the American bank accounts that had been opened
by the “arrows.” Finally, the arrows would allegedly collect the
illicit proceeds and send them to the defendants in Europe by wire
transfer and other methods. For example, the arrows allegedly forwarded
Pieptea $18,000 cash in fraud proceeds hidden inside hollowed-out audio
speakers. Other arrows allegedly used the proceeds to purchase
expensive Audemars Piguet watches, and then sent the watches to the
defendants abroad.

According to the complaint, it is estimated that the defendants earned over $3 million from the fraudulent scheme.

If convicted, the defendants each face a maximum sentence of 20 years in
prison on the wire fraud conspiracy and money laundering conspiracy
counts, and 10 years in prison on the passport fraud conspiracy count.

The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The
government’s case is being prosecuted by Assistant U.S. Attorneys
Cristina Posa, Vamshi Reddy and Claire Kedeshian of the U.S. Attorney’s
Office for the Eastern District of New York, and Trial Attorney Carol
Sipperly of the Criminal Division’s Computer Crime and Intellectual
Property Section.
The offices of the FBI Legal Attachés in Romania, the Czech Republic,
the United Kingdom, Canada and Hungary were instrumental in coordinating
efforts with the United States’ international partners, and the Justice
Department Criminal Division’s Office of International Affairs worked
with its counterparts in these countries to effect the provisional
arrests and requests for mutual legal assistance, including the
forfeiture of illegal proceeds of these crimes. The Department of
Justice’s Asset Forfeiture and Money Laundering Section also provided
assistance in the forfeitures.

The U.S. government thanks the Romanian government, in particular the
Ministry of Justice, the Directorate for Combating Organized Crime and
the Romanian Intelligence Service, for their collaborative efforts
throughout this long-term investigation, as well as the Czech National
Police, Hungarian National Bureau of Investigation, Metropolitan Police
Service in England, Montreal Police Service, Royal Canadian Mounted
Police, International Organized Crime Intelligence and Operations
Center, Internet Crime Complaint Center, Costa Mesa, Calif., Police
Department, Orange County, Calif., District Attorney’s Office and the
New York City Police Department for their assistance.